The 2027 guideline is 1.9%, down from 2.1% in 2026.

That is the number everyone looks up. Here is the one that actually costs money: for an increase taking effect 1 January 2027, the N1 must be given by 3 October 2026.

On a $2,500 unit, 1.9% is $47.50 a month, or $570 over a full year. Miss the 3 October notice deadline and that January 1 increase cannot take effect as planned. The effective date moves later, subject to the 90-day notice and 12-month rules, and every month of delay is revenue you do not recover.

So this post is about the four things an increase has to clear, in the order they will fail.

Where The 1.9% Comes From

Briefly, because it explains the ceiling.

Under section 120 of the Residential Tenancies Act, 2006, the guideline tracks the Ontario Consumer Price Index, averaged over the twelve months ending in May of the previous year. The 2027 figure reflects Ontario CPI from June 2025 to May 2026.

The RTA caps it at 2.5% regardless of what inflation does. At 1.9%, 2027 sits comfortably below that ceiling, as did 2026 at 2.1%. The 2.5% cap was the binding figure in 2023, 2024 and 2025.

Ontario published the 2027 guideline on its residential rent increases page on 23 June 2026.

Test One: Is The Unit Covered

The guideline applies to most private residential rental units under the RTA. Houses, apartments, basement apartments, condominiums, the rent portion of care homes, mobile homes and land-lease communities.

The exemption that matters: certain rental units and additions first occupied for residential purposes after 15 November 2018 are exempt from the guideline, subject to the specific exemption rules in the RTA. Section 6.1 contains the detail, and the tests differ between buildings, mobile home parks, land-lease communities and certain house types.

Two things operators get wrong here.

Property type alone does not determine coverage. A condominium is not exempt simply because it is a condominium. For the post-November 2018 exemption, the relevant occupancy and building or unit circumstances have to be established under the RTA. There are also separate exemptions from the guideline, including on turnover, community housing and long-term care homes.

The exemption needs to be evidenced. Ontario's own guidance tells landlords to retain evidence proving the exemption. If you are relying on it across a portfolio, those records have to exist and be findable. An exemption you believe in but cannot demonstrate is a dispute waiting for a tenant who reads the guideline.

Test Two: Timing

An increase can take effect only once at least twelve months have passed since the tenancy began or since the last lawful increase.

And the guideline is set by the effective date, not the date notice is given. This is the detail that catches people.

The 2026 guideline of 2.1% governs any increase taking effect during calendar 2026. The 2027 guideline of 1.9% governs increases taking effect on or after 1 January 2027. If you give notice in October 2026 for an increase starting in January 2027, you calculate at 1.9%, not 2.1%, because 2027 is when the new rent begins.

Applying last year's percentage to next year's increase is one of the easier ways to produce a notice that fails on amount.

Test Three: Notice

The RTA requires at least 90 days' written notice before the increase takes effect, on the prescribed Form N1.

For an increase taking effect 1 January 2027, that means giving the notice by 3 October 2026 at the latest.

Ninety days is a minimum, so giving it earlier is safe. Give it later and the effective date moves to the first date that satisfies both the 90-day notice requirement and the 12-month rule.

Two practical points that matter more than the date itself.

If you are sending the N1 by mail, build in the five-day deemed-service period. Under section 191, a notice sent by mail is deemed to have been given on the fifth day after mailing. The date you posted it is not the date it was given.

Proof of service is as important as the notice. A correctly calculated increase you cannot prove you gave on time is functionally the same as a late one. Across a portfolio, the record of what went out and when is the thing that determines whether an increase survives a challenge, and it is the thing most likely to be missing.

Test Four: Amount

Multiply the current lawful rent by 0.019.

On $1,800, that is $34.20, taking the rent to $1,834.20. On $2,500, $47.50, taking it to $2,547.50.

The word doing the work is lawful. The percentage applies to the lawful rent, not to whatever the ledger currently shows. If a previous increase was defective, the lawful rent may not be the rent you are collecting, and compounding a new increase on top of a bad one does not fix the original problem.

If you need more than 1.9%, an above-guideline increase may be available through an application to the Landlord and Tenant Board, subject to the statutory grounds and requirements. Grounds can include eligible capital expenditures, extraordinary increases in municipal taxes or utilities, and certain operating costs related to security services. The tenant receives notice of the application and has the right to respond. If you completed major capital work recently, that assessment is worth making now rather than after the guideline increase has already gone out.

What To Do Before 3 October 2026

Working backwards from the date.

Pull every unit where a rent increase could lawfully take effect in the first quarter of 2027. Identify which of those increases are intended to take effect on 1 January, because those notices must be given by 3 October 2026.

Confirm coverage for each. Guideline-covered, or exempt under the RTA's post-November 2018 rules, with the evidence behind the answer.

Calculate at 1.9%, on the lawful rent, for anything taking effect on or after 1 January 2027.

Give notice on Form N1, with enough margin for the five-day deemed-service period if you are mailing.

Record the date and method against the tenancy, not in an inbox.

And separately, review where market rent has moved. A 1.9% guideline in a market that has moved further than that is a gap the guideline will not close. That is a turnover conversation rather than an increase one, and it belongs in the same planning session.

Two Things That Surprise Operators New To Ontario

1. Ontario does not permit a separate damage or security deposit:
   A landlord may require a rent deposit, subject to the statutory limits, and that deposit is applied to the last rental period. Operators arriving from jurisdictions where a security deposit is routine sometimes collect one anyway, and it is not a small error.

2. A rent increase is not a lease renewal:
   When a fixed-term tenancy ends without renewal or termination, it is deemed renewed as a monthly tenancy on the same terms and conditions, subject to lawful rent increases. The increase is a separate process with its own form and its own notice period, and treating it as part of a renewal conversation is how the 90 days gets lost.

The Pattern Worth Recognising

If you operate under rent regulation in more than one jurisdiction, the shape of this will be familiar. The percentage is the part everyone looks up, and the procedure is the part that decides whether the increase stands.

It is the same structure that catches operators under rent control elsewhere: getting the number right does not help if the notice was late, the form was wrong, or the calculation ran off a rent that was not lawful to begin with.

Four tests. Coverage, timing, notice, amount. Fail any one and the increase does not stand as given.

FAQ

1. What is the Ontario rent increase guideline for 2027?
1.9%, applying to increases taking effect between 1 January and 31 December 2027. It was published on 23 June 2026 and is down from 2.1% in 2026.

2. When do I have to give the N1 for a 1 January 2027 increase?
No later than 3 October 2026. The RTA requires at least 90 days' written notice before the increase takes effect. Give it earlier if mailing, to allow for the five-day deemed-service period.

3. What happens if I give the notice late?
The increase cannot take effect on the date planned. The effective date moves to the first date that satisfies both the 90-day notice requirement and the 12-month rule.

4. Which guideline applies if I give notice in 2026 for a 2027 increase?
The guideline is set by the effective date. An increase taking effect on or after 1 January 2027 uses 1.9%.

5. Which units are exempt?
Certain units and additions first occupied for residential purposes after 15 November 2018 are exempt, subject to the specific rules in section 6.1 of the RTA. Retain the evidence establishing the exemption.

Sources: Ontario's residential rent increases guidance, the Residential Tenancies Act, 2006, and O. Reg. 516/06. This article describes general concepts and is not legal advice. Confirm the current guideline and your own position with the Landlord and Tenant Board or a qualified Ontario legal professional before giving any notice.